Developer quits area projects Trammell Crow is retrenching

November 12, 1991|By Edward Gunts

After investing four years and more than $20 million assembling seven parcels downtown to make way for Baltimore's tallest office building, the Trammell Crow Co. has pulled out of the development team for the 45-story One Light Street tower.

Trammell Crow also has abandoned plans to build the 800,000-square-foot Owings Run office complex, allowing its option to buy the Owings Mills parcel to expire.

It is re-evaluating its plans to participate in the development of Dorchester, a 300-acre business community planned for the southeast corner of Dorsey Road and the Baltimore-Washington Parkway.

And on Nov. 29, the partner who opened Trammell Crow's Baltimore office eight years ago, Dirk Mosis, will leave the company to open his own business in Baltimore.

The moves are a sign of the toll that the recession has taken on the Dallas-based development company, one of the country's largest, and of the adjustments it is making to respond to changing real estate market conditions.

From a staff of 25 two years ago, the Baltimore office as of next month will have a staff of two, not counting on-site property managers.

"We're not immune to what's going on in the real estate industry nationally," said Donald Taylor, managing director of Trammell Crow's newly structured Maryland division, which includes offices in Baltimore, Rockville and Columbia.

"When you look at the downsizing under way in corporations nationwide, all we've done is realign our organization to the opportunities that are out there. That's what's going on."

Mr. Taylor said that Mr. Mosis' departure doesn't materially affect the ownership of any other local buildings developed by Trammell Crow or the company's ability to launch new projects in Baltimoreonce market conditions improve.

But given the decreased demand for new office buildings in the foreseeable future, he said, Trammell Crow will put more attention on managing the assets it already has than on developing new buildings.

"We have tried to be more streamlined, more efficient," he said. "You might not see a new office building in downtown Baltimore for five years or more. To the extent that there is duplicative effort, we have tried to downsize."

Mr. Taylor and Mr. Mosis said that Trammell Crow will keep its Baltimore office inside the Signet Tower. Dan Hudson, a marketing principal in Trammell Crow's Columbia office, will now oversee leasing and management for both the Baltimore and Columbia operations.

APointing to studies that indicate 60 percent to 80 percent of the developers in the industry in the late 1980s won't be in business by 1995, Mr. Taylor said that Trammell Crow intends to be one of the survivors.

"We're not any different than Joe Average developer in America," he said. "If we're not responsive to the market, the market will make adjustments" that will shut out Trammell Crow. "Unfortunately, the market is a lot less forgiving when that happens."

Mr. Mosis said that Capital Guidance of Geneva, Trammell Crow's financial partner in the One Light Street project, has taken 100 percent ownership of the individual parcels within the construction site and is committed to continuing with development of the office tower.

CHe said that his new firm, Mosis & Associates Inc., will be Capital Guidance's local representative on the $180 million One Light Street project and will oversee leasing and maintenance of the buildings now on the site until the new development gets under way.

The buildings, in an area bounded by Light, Redwood, Baltimore and Grant streets, range from three- and four-story commercial buildings on East Baltimore Street to the vacant Southern Hotel at Redwood and Light streets.

Mr. Mosis said that Trammell Crow did not want to continue investing money for taxes and upkeep on the buildings within the One Light Street parcel.

He is pleased that Capital Guidance wanted to remain involved in the project. "It's the same players, except that it's no longer Crow," Mr. Mosis said. "I'm very happy to continue to be involved with it and for Capital Guidance to be committed to it. . . . They have the capital, so it's good that they're staying involved."

In light of the slow real estate market, he said, Capital Guidance has decided to extend the leases of tenants inside the buildings, which have been on month-to-month leases. Capital Guidance will even make improvements to 5 Light St., where Mosis & Associates will move by early 1992.

Asked about the future of the deteriorating Southern Hotel, Mr. Mosis said that it will remain vacant and that he and Capital Guidance will be closely monitoring its condition.

Mr. Mosis said that Trammell Crow offered him a chance to move to another city, but he wanted to remain in Baltimore and start a business of his own.

"I'm excited about it," he said. "It's a bad time economy-wise, but I'm excited about Baltimore's prospects through the 1990s, with the [Baltimore-Washington International] airport expanding and new businesses coming to the port of Baltimore. I think this is a good place to be."

In all, Trammell Crow controls 1.7 million square feet of office space in Maryland and between 3 million and 4 million square feet of industrial and research and development space, Mr. Taylor said.

Trammell Crow has separate offices that are responsible for retail and residential projects, and they are not directly affected by the staffing changes involving the division for office and industrial development.

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